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PitchBook Annual Overhang 2012

PitchBook Annual Overhang 2012

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Bet ter Data. Bet ter Decisions.

PitchBook

The 2012 PitchBook

CAPITAL OVERHANG and FUND CASHFLOW Report
Presented by:

S p

.......................................... No part of this publication may be reproduced in any form or by any means – graphic.................... 16 About PitchBook ............................................. electronic.......The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data TABLE OF CONTENTS Introduction ... 10 Fund Cashflows .................................................................................... but accuracy and completeness cannot be guaranteed........................................pitchbook......................................... 15 Venture Capital .......................................... www........ taping.............. 4 Fund Cashflows .............. Contents are based on information from sources believed to be reliable............................................................................................ 9 Capital Overhang ........................ 14 Private Equity ....... including photocopying............................................................267........................................................... 17 COPYRIGHT © 2012 by PitchBook Data........................................................................... This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment....................... 11 Returns Multiples Tables .com 877...................................... or mechanical..................................................................................5593 -i- Bet ter Data.. Bet ter Decisions............................. 13 Cashflow Tables ................................................................................................................... All rights reserved............................. Inc................................................................... 3 Percent Unfunded ... Inc..................................... PitchBook .................. 6 Venture Capital .............. 9 Percent Unfunded ... and information storage and retrieval systems – without the express written permission of PitchBook Data................ current or future recommendation to buy or sell any security or an offer to sell.................. or a solicitation of an offer to buy any security....................................................................... 5 Returns Multiples Tables .................................................... 3 Capital Overhang ...................................... Nothing herein should be construed as any past.................................... recording....................................... ii Private Equity .............

reduced fundraising and a steady level of investment have helped to shrink PE reserves by 25% from their peak. the company works collaboratively with more than 60. Venue® data rooms provide complete control. contributions.5x or better for funds with vintages of 2004 or earlier.pitchbook. a $10.6 billion corporation with more than 600 locations and nearly 60. Venue® data rooms are backed by RR Donnelley. logistics and business process outsourcing services to leading clients in virtually every private and public sector. In 2011. manage. The same cannot be said of venture capital. this report also examines fund distributions. PitchBook . charts. • PE firms have fared better than their VC counterparts. with just one vintage since 1999 maintaining a TVPI (total value/paid-in) multiple of 1.ii - Bet ter Data.com 877. you will find additional analysis of these trends and developments in PE and VC investing accompanied by descriptive graphs. and returns dating back to 1999 in an effort to understand how the last couple of years have impacted cashflow for PE and VC funds. consistently averaging a TVPI of 1. printing. The theoretical 10-year lifespan for funds is rarely accomplished in practice.000 customers worldwide to develop custom communications solutions that reduce costs. Whether you’re conducting due diligence for a merger.000 employees worldwide.5593 . raising capital. which documents they see. enhance ROI and ensure compliance. Venue is the ideal virtual workspace for managing critical information. Some of the key findings include: • • Annualized cashflows for both private equity and venture capital were positive for the second consecutive year in 2011. and how they can interact with those documents. many private equity (PE) and venture capital (VC) professionals have expressed concern over the surfeit dry powder that built up during the years leading up to the financial crisis. and tables. PE and VC funds dating back to 1999 were still distributing significant amounts of capital to limited partners and continued to hold investments in their portfolios.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data ON CAPITAL OVERHANG AND FUND CASHFLOW Over the last five years. the company employs a suite of leading Internet based capabilities and other resources to provide pre-media. We hope the information and data included in the report will provide insight into recent investing activity and help you make better decisions moving forward. Inside this report. Bet ter Decisions. or developing a document repository. fueled by strong distributions to limited partners. RR Donnelley’s total revenues are larger than all other virtual data room providers combined.3x or higher. share and track all of your sensitive information. Founded more than 147 years ago. • VC firms have failed to deliver strong returns to their investors for more than a decade. Our report shows that while the capital overhang remains large. In addition to the capital overhang. Drawing on a range of proprietary and commercially available digital and conventional technologies deployed across four continents. www. ensuring that you can manage who has access to your data room. Venue® is a secure online workspace with a powerful feature-set and an intuitive design that allow you to easily organize. where larger funds have propelled a spike in fundraising activity and curtailed the steady decline of dry powder that had been seen in recent years.267. RR Donnelley is a global provider of integrated communications.

Firms closed funds totaling $18. It seems that a couple of years of subdued fundraising and steady investment have helped to chip away at the overhang.36 $9.75 $1.92 $12. Bet ter Decisions. Blackstone VI was the only mega-fund that closed.06 $2.83 $3.65 2007 $0.80 2011 $0.82 2006 2007 $463. but firms still hold more than $432 billion in uncalled commitments.60 $ $18.27 $10.31 $560.55 $50.58 $43.07 (all values in $B) -3- Bet ter Data.36 2010 $1.91 $35.267.01 $1.67 $477. albeit with a staggering $14.63 $5. Cumulative Overhang Current Overhang ($B) by Vintage Cumulative Overhang ($B) Overhang by Vintage $18.79 $3. The first quarter saw the close of zero mega funds (more than $5 billion).78 $14.89 $27.80 $32.60 $6.9 billion in commitments. which returned in 2011 after a noticeable absence in 2010.95 billion in 1Q 2012. the headline story in PE fundraising has been the massive glut of dry powder.43 $530.com 877. firms are still struggling to find investments for older vintage funds. consistently attracting more than half of all PE capital during the last three years. 2008 vintage funds have $102 billion in reserves.33 $70.39 Cumulative Overhang www.97 $16.46 $4.05 $2.89 $93.59 $28.33 $456. which has helped reduce the capital overhang and should facilitate the distribution of the nearly $170 billion still left in 2007 and 2008 vintage funds.pitchbook. The $1 billion to $5 billion fund range has emerged as the sweet spot. While the cumulative overhang has fallen by 25% since 2008.57 $7.66 $ $55.5593 $102.86 2012 $0. PitchBook .85 2009 $0.95 * *As of 5/1/2012 Source: PitchBook Under $100M $100M-$250M $250M-$500M $500M-$1B $1B-$5B $5B+ 2006 $0.09 $3.32 $1.90 $12. the overall fundraising environment has been evolving in recent years.91 2008 $0.82 $25.18 $5. more than any vintage since and nearly double the amount of dry powder in 2010 vintage funds.57 $7.95 Total Current Overhang $23. setting a slightly slower pace than in 2011. Fundraising was constrained in 2009 and 2010. However. which peaked at $576.15 $66.12 2008 2009 2010 2011 2012 $576.26 $0.04 $432. From 2010 to 1Q 2012.90 $3.82 $30.02 $5.27 $2.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data PRIVATE EQUITY CAPITAL OVERHANG For several years.3 billion during the boom year of 2008.39 $6.

Bet ter Decisions. For the 2008 vintage.267.7 4.2 1. PitchBook . a PE firm has a 10-year timespan after the final close of a fund to make and exit its various investments— but this has not been the case. that number has risen to 38%. The longer this trend continues. Funds raised from 1999 to 2007 held an average of 29% in unfunded commitments at the end of their third year.2 5.0 3. The amount of committed capital that firms fail to allocate during the typical five-year investing window now averages more than 10% and continues to rise. largely attributable to the rampant fundraising that occurred that year.4 9. Beginning with the 2008 vintage.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data PRIVATE EQUITY PERCENT UNFUNDED 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 84% 53% 80% 50% 65% 34% 48% 23% 36% 14% 23% 9% 13% 8% 9% 8% 8% 8% 7% 8% 5% 7% 4% 6% 4% 2001 2002 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 84% 72% 53% 33% 20% 14% 12% 13% 8% 7% 7% 75% 60% 81% 41% 62% 29% 40% 19% 25% 13% 22% 9% 16% 8% 11% 6% 8% 6% 8% As of Year 84% 64% 86% 39% 62% 22% 40% 15% 24% 11% 21% 9% 17% 7% 12% 78% 53% 35% 27% 20% 11% 70% 53% 45% 31% 23% 72% 61% 43% 38% 73% 57% 48% 73% 65% 79% Source: PitchBook In theory.com 877. the rate that capital is called down has been gradually slowing.3 4.1 1.pitchbook. however. This phenomenon has created a bottleneck and slowed the rate of investment for subsequent vintages. the deeper the problem will become.5593 -4- Bet ter Data.1 Source: PitchBook www.7 2. Dry Powder from Select PE Funds Fund GS Capital Partners VI TPG Partners VI Carlyle Partners V Berkshire Fund VIII Silver Lake Partners III Bain Capital Fund X TPG Partners V Apollo Investment Fund VI Cerberus Institutional Partners IV Investor GS Capital Partners TPG Capital The Carlyle Group Berkshire Partners Silver Lake Partners Bain Capital TPG Capital Apollo Global Management Cerberus Capital Management *As of 12/31/2011 Vintage 2007 2008 2009 2011 2007 2008 2006 2006 2007 Dry Powder ($B)* 9.

PitchBook . limited partners would expect the vast majority of their commitments to have already been called and invested. 2000 vintage funds currently boast positive cashflows of $20.5593 -5- Bet ter Data. On the flip side. and 2007 vintage funds currently have negative cashflows of $18. achieving positive cashflows of $11.5 billion.93 billion for the year. Bet ter Decisions. an indication that significant investment is still underway. as opposed to decreases in fund contributions. The most promising characteristic of this development is that the improved cashflows are largely attributable to increases in distributions. www. Positive cashflows have been elusive for the PE industry as a whole and have only been achieved in four separate years since 1999. these funds are 12 years old and should have already exited all of their investments under a standard timetable. general partners are still calling down contributions from funds raised as far back as 2003. By the fifth year of a fund. While this appears encouraging at first blush. the $155.1 billion given back to limited partners was the second highest in the last decade.pitchbook. While distributions in 2011 were down 14% year-over-year. PE firms barely crossed the threshold into positive territory in 2010 and were able to replicate the feat in 2011. 2011 CASHFLOW BY VINTAGE YEAR Capital ($M) Contributions ($M) Distributions ($M) Cashflow (Distributions-Contributions) Source: PitchBook The sluggish pace of PE distributions becomes apparent when looking at funds by vintage year. determined by the difference of fund distributions and contributions.com 877.75 billion.267.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data PRIVATE EQUITY ANNUALIZED FUND CASHFLOW Capital ($B) Contributed ($B) Distributed ($B) Cashflow (Distributions-Contributions) Source: PitchBook Following several years of negative cashflows. However.

5 0.0x and make a limited partner whole after five years.1 0.8 0.1 0.1 1.9 0.2 0.9 0.7 0.9 0.9 0.5 1.7 1. The problem persists through all vintages and appears to be worsening.3 1.2 0.9 1.9 0.5 0.2 0.8 0.8 0.8 0. PE firms continue to deliver positive cashon-cash returns to their investors.3 DPI as of Year 0.8 0.6 0.3 0.3 0.0 0.0 0.9 0.2 0.9 0.6 0.0 0.1 0.7 0.8 0.3 0.0 1.9 1.4 0.9 0.5 0.1 0.9 1.2 1.7 0.6 0. but the vintage still maintains an average RVPI of 0.1 1.2 0.9 0.5 0. Bet ter Decisions.8 1.0 1.0 1.6x or greater and the 2006 vintage still has an RVPI of 0.5 0.1 1.8 0.1 0.8 0.2 0.2 0.1 0.5 0.8 0.1 0.1 0.0 0.8 0.5 0.1 1.0 0.3 0.5 0.1 1.0 0.3 0.0 0.4 0.3 0.8 1.0 0. PitchBook .0 Source: PitchBook RVPI MULTIPLES The struggles of the reduced rate of distributions are underscored by the RVPI (remaining value/paid-in) multiples of older vintage funds.0 1.3 0.1 0.9 0.1 1.8 0.9 0.9 0.8 0.7 0.8 Source: PitchBook www. 1999 2000 2001 0.3x.1 0.1 0.9 0.2 0.0 0.pitchbook.3 0.1 0.2x.4 RVPI as of Year 0. each vintage since 2003 currently has an RVPI of 0.0 0.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data PRIVATE EQUITY DPI MULTIPLES While the flow of distributions has slowed since the middle of the 2000s.9 0.2 0.6 0.1 0.4 0.4 0.0 0.267.6 0.1 0.9 0.0 1. Vintage Year 2004 2005 2006 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 2001 1.5 1.9 0.7 0.2 0.8 0.9x more than five years after its final close despite a paltry average DPI of 0.0 0.6 1.1 1.9 0.1 0.6 0.6 0.2 0.5 0.0 0.1 0.9 0.0 0.2 1.3 1.4 0. A typical 2002 vintage fund was able to achieve a DPI (distributed/ paid-in) of 1.8 0.9 1.2 0.2 1.7 0.6 0.3 0.2 0.5 0.1 0.1 0.4 0.1 1.6 0.1 0.3 2002 2003 2007 2008 2009 2010 2011 0. the financial crisis has caused a significant change in the length of time it takes for funds to realize their investments.9 0.6 0.com 877.1 0.1 1.8 0.1 1.8 0.8 1.2 0.3 0.1 0.6 0.0 1.1 0.1 1.4 0.7 0. However.5593 -6- Bet ter Data.3 0.8 0.6 0.1 0. PE fund limited partners should theoretically no longer be worrying about a fund that was raised in 1999.6 0.7 0.7 0. while the average 2003 vintage fund has yet to return all invested capital back to its stakeholders eight years into its lifecycle.5 0.9 0.9 1.2 0.1 1.8 0.6 2002 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0.

2 0.5 1. All of PitchBook’s data goes through a rigorous multi-stage cleaning (secondary research) and validation process (primary research) to ensure its accuracy.1 1.3 1. PitchBook Platform Data Tallies1 Companies Transactions Professionals Investment Firm Professionals Investors (Financial & Strategic) Investors (PE & VC) Funds Funds with Returns Open/Upcoming Funds Service Providers Limited Partners % Funds with Dry Powder Funds with Cash Flows Funds with IRR 1 Advanced Analytics 50.pitchbook.9 1.671 16.2 0.2 1. service providers and much more.5 0.7 TVPI as of Year 0. limited partners.617 9.0 1.5 1.5 1.1 1.5593 -7- Bet ter Data.9 1. as well as more upside potential from current portfolio investments.0 1.4 1. allowing users to see where the data has been sourced.9 0.0 0.0 1. Funds raised from 1999 to 2004 all have TVPI multiples of 1.1 1.3 1.267.3 1.com 877.9 1.4 1.3 1.7 1.8 2. PitchBook's data is fully transparent.6 1. PitchBook's powerful analytics and charting tools allow users to customize information for individual purposes (cash flows. www. which is to be expected at the beginning of the fund’s lifecycle as the result of the traditional J-curve pattern.5 1.3 1.0 0.1 1.1 1.0x or greater.1 2.191 All Pitchbook data sourced from the PitchBook Platform as of 5/22/12.6 1.6 1.217 5.9 1.862 7.6 1.3 1.0 0.599 70% 3.808 19.0 1. Bet ter Decisions. accompanied by complete sets of quarterly and annual historic returns. lead partners on deals.9 1.1 1.2 1.0 1.1 1.3 1.6 1.7 1.0 1.8 2001 2002 2003 2007 2008 2009 2010 2011 0.427 2.2 1.9 1.2 0.7 1.1 1.1 1.7 1.7 1. portfolio companies.3 1.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data PRIVATE EQUITY TVPI MULTIPLES Although PE firms have had trouble finding investment and liquidity opportunities in recent years.3 1.1 1.5 1.0 1.5 1.5 0. The numbers begin to lag somewhat beginning with 2005.487 3.8 1.0 1.5 2000 1. they continue to deliver strong returns to their investors.2 1.6 1.3 1.8 1.4 1.2 1.0 1.653 6. Vintage Year 2004 2005 2006 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 1.353 84. cash-on-cash multiples and/or fund dry powder for both individual funds or customized groups of funds).3 0.1 1.398 74.5 1.994 189.0 1.9 1. but all vintages maintain a TVPI of 1.2 1.2 1.5 1.5 1.3 1. PitchBook . IRRs.8 Source: PitchBook P itch B ook PLATFORM HIGHLIGHTS Competitive Advantage Comprehensive Coverage Rigorous Research Transparent Data PitchBook’s fund data includes detail-intensive drill-downs on returns.5x or higher.1 1.3 0.2 1. The exceptions is 2011.8 0.

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44 $2.98 2010 $67. an increasing proportion of VC capital has been allocated to larger funds.5 billion.12 $1. 2012 has set a breakneck pace in VC fundraising.pitchbook.24 $3.18 $1.02 $13.19 2007 $0. at the current rate of investment.41 $12. Furthermore.98 $ $4. compared to just 39% in 2006.55 $3. a trend that will only intensify the overhang if it continues.08 $2.10 $1.26 $4.64 (all values in $B) 2009 $0.55 Cumulative Overhang www.60 $3.61 $1.44 $5. the overhang is not as pressing of a concern for VC investors as it is for PE.41 $3.61 $1.89 2009 $79. Bet ter Decisions. However. as the push by VCs to invest this increasing dry powder could potentially fuel another bubble.06 2011 $63. With memories of the tech bubble still fresh in people’s minds.93 $4.94 $1.14 $1. In the last three years.45 $6.85 2012 $0. many in the industry view the large funds and droves of capital entering the asset class as a troubling trend.26 $1. the stockpiles of dry powder only fell by 2% from 2011 to 2012.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data VENTURE CAPITAL CAPITAL OVERHANG BY VINTAGE YEAR The VC capital overhang has been in steady decline since 2007 and now sits at $62.66 2008 $84.69 2008 $0.com 877.51 2007 $86.86 $3. diminishing the importance of smaller sized funds on the overhang.5593 2006 $78.267.34 $1.30 2012 $62.53 Total Current Overhang $5.90 -9- Bet ter Data. While a large total in aggregate.3 billion in commitments.05 $1.69 $1.47 $10.85 $2. with firms already closing on $6.56 $11.55 $1. Overhang by Vintage Current Overhang ($B) by Vintage Cumulative Overhang Cumulative Overhang ($B) *As of 5/1/2012 Source: PitchBook Under $100M $100M-$250M $250M-$500M $500M-$1B $1B-$5B 2006 $0.98 2011 $0.21 $0. PitchBook .10 $1.33 $3.00 $1.34 2010 $0. 2011 saw a record-setting number of funds in excess of $1 billion and nearly three-quarters (72%) of the capital raised so far in 2012 has come through funds of $500 million and larger. the reserves will last just a little more than two years.

444 1.267. having allocated 60% of their capital in the first two years thanks in part to muted fundraising during the period.pitchbook. However.449 1.600 1.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data VENTURE CAPITAL 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 2001 79% 43% 72% 33% 63% 87% 25% 50% 75% 17% 36% 61% 12% 26% 46% 8% 19% 31% 6% 12% 18% 4% 7% 10% 3% 6% 7% 3% 6% 5% 2% 8% 5% 1% 4% 3% 2002 AVERAGE OF UNFUNDED 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 79% 69% 53% 37% 24% 18% 12% 7% 7% 3% 92% 77% 56% 37% 26% 16% 12% 9% 5% As of Year 89% 72% 90% 54% 72% 37% 53% 23% 36% 16% 27% 12% 19% 7% 14% 89% 69% 53% 39% 25% 19% 84% 66% 55% 38% 30% 77% 69% 56% 43% 77% 57% 40% 80% 63% 87% Source: PitchBook Across the VC universe. At the beginning of the decade.com 877.10 - Bet ter Data. firms routinely invested more than half of the capital committed to a fund within the first three years of the fund’s close. Funds through the 2008 vintage were able to maintain this pace. PitchBook . with the wave of money flowing into funds so far in 2012. firms have been fairly consistent with the rate that they call down capital from limited partners during the last 13 years.175 633 499 470 360 352 Source: PitchBook www. Bet ter Decisions. Dry Powder from Select VC Funds Fund Bessemer Venture Partners VIII Invention Investment Fund II Technology Crossover Ventures VII New Enterprise Associates 13 Invention Development Fund I SV Life Sciences Fund V InterWest Partners X VantagePoint Venture Partners V Lightspeed Venture Partners VIII Investor Bessemer Venture Partners Intellectual Ventures Technology Crossover Ventures New Enterprise Associates Intellectual Ventures SV Life Sciences Advisers InterWest Partners VantagePoint Capital Partners Lightspeed Venture Partners *As of 12/31/2011 Vintage 2011 2008 2007 2010 2007 2010 2008 2006 2008 Dry Powder ($M)* 1.5593 . and 2009 vintage funds are even ahead of schedule. venture capitalists will either have to increase their pace of investment or take more time calling down capital.

with a valuation around $100 billion. PitchBook . and negative for all newer funds.267. www. will likely lead to a third consecutive year of positive returns for the VC industry.pitchbook. In fact.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data VENTURE CAPITAL ANNUALIZED FUND CASHFLOW BY YEAR Capital ($B) Contributed ($B) Distributed ($B) Cashflow (Distributions-Contributions) Source: PitchBook Net cashflows in the VC industry have historically been sporadic. where broad trends appear to emerge over time. which would seem like a positive sign. However. except these funds still have yet to return 60% of their investors’ original capital commitment after more than a decade.61 billion. these funds will inevitably take more than the expected 10 years to return capital to their limited partners.com 877. Bet ter Decisions.11 - Bet ter Data. Contributions increased 8% in 2011 but were outpaced by a 14% increase in distributions from 2010 levels.5 billion to limited partners in 2011. To that end. Already eight years into their investment lifespan. 2011 CASHFLOW BY VINTAGE YEAR Capital ($M) Contributions ($M) Distributions ($M) Cashflow (Distributions-Contributions) Source: PitchBook The cashflows by vintage year for the VC industry do not reveal any major surprises: flows are positive for funds closed in 2005 and earlier. cashflows in VC are prone to substantial changes year-over-year as the smaller overall size of the market allows it to be distorted by major deals. driving positive cashflow up 53% to $5. is that 2003 vintage funds called down nearly $700 million in capital from their limited partners during 2011. however. frequently undergoing seismic shifts year-overyear. 2000 vintage funds delivered nearly $7. What is somewhat surprising. 2011 marked the first time in more than a decade that VC firms delivered positive cashflows in two consecutive years.5593 . this is already happening. Unlike PE. the IPO of Facebook.

0 1.7 0.1 0.3 0.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data VENTURE CAPITAL DPI MULTIPLES Distributions have been difficult.9 1.7 0.0 0.9 0.4 0. However.9 0.9 0.9 0.5593 . to come by for limited partners invested in venture capital funds.4 0.6 0.4 0.2 0. Funds from every vintage year 2001 and later maintain an average RVPI multiple of 0.1 0.2 0.1 0.2 0.2 0.6 0.9 0. While some of the top performers have certainly achieved favorable returns for investors.9 0.1 1.3 0.1 0.9 0.4 0.7 0.3 0.1 0.2 0.1 0.1 0.8 0.4 0.8 0.7 0.9 0.0 0.5 0.9 0.4 0.7 0.8 0.4 0.6 0.6 0.0 0. 1999 2000 2001 1.6 0.com 877.8 0. let alone 0.7 0.4 0.2 0.0 0.4 0.0 0.1 0.8 0.5 0.8 1.1 0.0 0.9 1. particularly the funds that are more than a decade old.8 0.1 0.0 0.4 0.1 0.3 0.0 0. Vintage Year 2004 2005 2006 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 2001 0.3 0. especially with the outsized gains that investors have been conditioned to expect from the asset class.1 0.9 0.0 1.7 0.0 0.4 0.1 0.pitchbook.3 0.0 0.4 0.8 0.0 0. PitchBook .6 0.1x.3 0.267.2 0.1 0.0 0.1 0.1 0.9 0.5 0.12 - Bet ter Data.0 0.9 0.9 1.8 0.3 0.7 0. Going back to 1999.0 1.1 0.5 0.1 0.0 0.6 0.9 0.8 0.7 0.2 0.8 0.1 0.1 0.3 1.3 0. investors can look to RVPI multiples for a glimmer of hope.0 0.2 0.3 0.0 0.0 0. if not impossible. Now six years into their investing.5 0.2 0.3 0.2 0.2 0.6 DPI as of Year 0. the overall VC landscape seems pretty fruitless.7 0.7 0.1 0. not a single vintage year has managed to achieve a DPI multiple of 1.0 0.7 0.7 0.8 0.0 0.0 0.0 0.0 0.6 0.2 0.9 0.5 2002 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1.1 0.5 0.5 0. Bet ter Decisions.5 RVPI as of Year 0.5 0.7 0.8x.3 0.0 0. investors would expect these funds to be more proactive in divesting their holdings.2 0.7 0. 2006 vintage funds have delivered a measly DPI multiple of 0.2 0.6 2002 2003 2007 2008 2009 2010 2011 0. meaning the funds still hold a significant amount of value and upside potential.5x or higher.1 0.6 0.8 0.6 0.3 0.9 1.6 0.8 0.3 0.0 Source: PitchBook RVPI MULTIPLES Despite the middling distributions seen over the last decade.0 0.9 0.7 0.0 0.1 0.9 1.4 0.0x.5 0.1 0.0 0.5 0.6 0.8 0.0 Source: PitchBook www.9 0.9 0.1 0.9 0.4 0.

9 0.9 1.8 0.9 0.9 0.1 0.1 1.5 0.2 1. The total value tends to rise later in the life of the fund.9 1.0 1.7 0.267.0 1.8 0.9 1.4 0.2 0.0 1.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data VENTURE CAPITAL TVPI MULTIPLES A quick glance at TVPI multiples will reveal a rather grim reality—VC firms simply aren’t living up to investors’ expectations.1 0.7 0.2x.1 1. meaning that investors probably will not be made whole on their original investment.1 0.9 1.9 1.8 0. Bet ter Decisions. in fact.0 1.0x.0 1.9 1.8 0.5593 .0 1. 2005 is the only vintage with a TVPI multiple greater than 1.2 1.pitchbook.0 0.0 0.0 1.1 As of Year 0.0 1.0 1.0 1.8 0. PitchBook .9 0.2 0.8 1.2 1.1 1.8 0.9 0.9 1.9 1.4 1.0 1.9 0.9 0.7 0. 1999 and 2000 vintage funds currently have a TVPI multiple of less than 1.7 0. The trouble does not stop there however.7 1.9 0.9 1.0 1.0 0.0 1.com 877. so there still is hope for the later vintages.9 1.0 0.9 1.9 0.1 1.2 0.9 0.9 0.9 0.0 1.0 0.0 1.0 1.7 0.8 0.0 1.13 - Bet ter Data.0 1.9 0.9 2001 2002 2003 2007 2008 2009 2010 2011 0.8 0.1 1.8 1.8 Source: PitchBook www.0 1. Vintage Year 2004 2005 2006 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 1.0 0.0 1.8 0.6 0.9 0.1 1.1 1.

Net Cashflow: These tables take the difference of the two aforementioned statistics (Average of Distributed – Average of Called) to show the net cashflow as a percentage of committed capital. PitchBook . Bet ter Decisions. distributed more than their limited partners’ initial fund commitment. www. Conversely. as well as an analysis of industry-wide trends on an annualized basis. Vintages with a percentage greater than 100 have. the more capital that has been called.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data VENTURE CAPITAL CASHFLOW TABLES Combining data from more than 16.pitchbook. By combining distributions and contributions into a single metric. For example. In addition.14 - Bet ter Data. UNDERSTANDING THE TABLES Average of Called: These tables illustrate what percentage of committed capital has been called down by funds according to their vintage year. The percentages are calculated by dividing the amount of contributed capital by the total commitment on an aggregate basis for all funds in a particular vintage. the table is able to show how limited partners’ net investment cash flow changes throughout the life of a fund and across different vintages. the PitchBook Cashflow Tables provide a clear overview of fund distributions and contributions by vintage year. Average of Distributed: These tables depict the ratio of capital that has been distributed to limited partners relative to the total commitments to funds with a particular vintage.267. on average. the higher the percentage.5593 . These tables allow readers to easily see the cashflows for specific vintages while gauging how performance on a cashflow basis has changed on a year-to-year basis.000 PE and VC funds. The percentages are calculated by dividing the aggregate amount of distributions with the total amount of committed capital. dating back to 1999. a positive percentage indicates that investors have realized a gain on their overall fund investment by that percentage of thier original commitment. a value of -45% means that limited partners currently have recieved distributions equal to 65% of thier total committed capital invested in the fund.com 877. the data can easily be used to perform a quick side-by-side benchmarking of fund performance by vintage year.

5593 Bet ter Data.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data PRIVATE EQUITY 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 13% 16% 6% 47% 20% 50% 35% 66% 52% 77% 64% 86% 77% 91% 87% 92% 91% 92% 92% 92% 93% 92% 95% 93% 96% 94% 96% 2001 13% 16% 28% 47% 67% 80% 86% 88% 87% 92% 93% 93% 2002 AVERAGE OF CAPITAL CALLED 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 14% 25% 40% 59% 71% 81% 87% 91% 92% 94% 94% 6% 19% 38% 60% 75% 78% 84% 89% 92% 92% As of Year 18% 16% 36% 61% 78% 85% 89% 91% 93% 5% 14% 38% 60% 76% 79% 83% 88% 10% 22% 47% 65% 73% 80% 89% 16% 30% 47% 55% 69% 77% 19% 28% 39% 57% 62% 22% 27% 43% 52% 16% 27% 35% 12% 21% 6% Source: PitchBook AVERAGE OF DISTRIBUTED CAPITAL 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 0% 1% 4% 7% 10% 18% 40% 64% 82% 103% 105% 105% 121% 127% 2000 0% 1% 2% 6% 15% 35% 56% 80% 97% 110% 112% 126% 136% 2001 11% 6% 5% 10% 25% 51% 93% 122% 128% 135% 142% 153% 2002 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 0% 0% 4% 22% 39% 65% 97% 104% 108% 117% 126% 0% 1% 5% 14% 33% 54% 65% 73% 86% 89% As of Year 11% 5% 5% 13% 50% 61% 61% 82% 79% 0% 1% 2% 5% 13% 15% 25% 45% 0% 1% 3% 6% 8% 16% 25% 1% 2% 5% 7% 14% 18% 1% 2% 3% 10% 22% 3% 4% 7% 8% 1% 2% 4% 1% 2% 0% Source: PitchBook NET CASHFLOW 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 -12% -15% -43% -43% -55% -59% -46% -27% -9% 11% 13% 13% 28% 33% 2000 -6% -19% -33% -45% -49% -42% -30% -11% 5% 17% 18% 30% 39% 2001 -2% -10% -23% -37% -42% -29% 7% 34% 42% 43% 49% 60% 2002 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 -14% -25% -35% -37% -32% -16% 10% 14% 15% 22% 32% -6% -18% -7% -33% -11% -5% -46% -30% -13% -10% -42% -48% -36% -21% -15% -24% -28% -55% -45% -28% -18% -18% -24% -64% -59% -43% -26% -19% -17% -28% -64% -65% -48% -37% -23% -15% -6% -9% -58% -65% -56% -47% -36% -25% -11% -3% -14% -43% -63% -59% -40% -45% -31% -19% . PitchBook .267. Bet ter Decisions.pitchbook.com 877.15 - As of Year -6% Source: PitchBook www.

Bet ter Decisions.267. PitchBook .16 - As of Year -1% -10% -30% -45% -59% -67% -71% -11% -16% -33% -44% -58% -60% -17% -23% -30% -41% -51% -14% -22% -41% -56% -17% -19% -15% -35% -13% Source: PitchBook -5% www.The 2012 Capital Overhang and Fund Cashflow Report | PitchBook Data VENTURE CAPITAL 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 44% 21% 34% 57% 28% 67% 37% 75% 50% 83% 64% 88% 74% 92% 81% 94% 88% 96% 93% 97% 94% 97% 94% 98% 92% 99% 96% 2001 19% 13% 25% 39% 54% 69% 82% 90% 93% 95% 95% 97% 2002 AVERAGE OF CAPITAL CALLED 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 25% 21% 31% 47% 63% 76% 82% 88% 93% 93% 97% 9% 8% 23% 44% 63% 74% 84% 88% 91% 95% As of Year 18% 11% 28% 46% 63% 77% 84% 88% 93% 3% 10% 28% 47% 64% 73% 81% 86% 1% 11% 31% 47% 61% 75% 81% 11% 16% 34% 45% 62% 70% 17% 23% 31% 44% 57% 14% 23% 43% 60% 20% 20% 37% 15% 13% 5% Source: PitchBook AVERAGE OF DISTRIBUTED CAPITAL 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 2000 0% 3% 0% 8% 19% 10% 16% 12% 17% 15% 25% 22% 27% 27% 35% 30% 41% 41% 50% 53% 56% 57% 60% 59% 71% 66% 58% 2001 0% 0% 0% 1% 3% 11% 21% 31% 37% 40% 47% 58% 2002 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 0% 2% 2% 4% 8% 13% 25% 31% 35% 45% 59% 0% 0% 0% 2% 9% 16% 24% 26% 37% 41% As of Year 0% 6% 7% 7% 10% 17% 18% 14% 24% 0% 1% 5% 5% 7% 10% 15% 38% 0% 0% 1% 2% 3% 8% 10% 0% 0% 1% 1% 3% 10% 0% 0% 1% 3% 6% 0% 1% 2% 4% 2% 1% 2% 0% 0% 0% Source: PitchBook NET CASHFLOW 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1999 -44% -17% -49% -57% -63% -68% -67% -65% -64% -55% -44% -40% -39% -32% 2000 -34% -9% -21% -33% -39% -47% -46% -47% -43% -38% -34% -22% -38% 2001 -19% -13% -25% -38% -51% -58% -61% -59% -56% -55% -49% -39% 2002 2003 Vintage Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 -25% -20% -29% -43% -55% -64% -57% -56% -58% -48% -38% -9% -8% -18% -23% -5% -3% -42% -20% -9% -54% -39% -23% -57% -54% -42% -59% -59% -56% -62% -66% -63% -54% -74% -65% -54% -70% -47% .com 877.pitchbook.5593 Bet ter Data.

353 2 74.6x more 1.700 1 1.8x more More Transactions 3.000 21.0x more More PE & VC Professionals 6.7x more More Open/Upcoming Funds More Limited Partners 1 Data sourced from 4Q 2011 nearest competitor publication.409 1 1 8. All other competitor data sourced from nearest competitor site on 4/4/12. Contact PitchBook: www.com l main: (877) 267-5593 l email: demo@pitchbook. Better Decisions. rigorous research & award-winning technology.PLATFORM HIGHLIGHTS Better Data. 189.862 2 4. P itch B ook Competitive Advantage With its robust data.000 1 1.994 2 25. 2 All PitchBook data sourced from the PitchBook Platform as of 5/22/12.pitchbook. faster.599 2 2.com . PitchBook gives you the tools to make better decisions.

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